Britain’s Largest Charities Face Slowdown in Private Donations

Income growth among Britain’s largest charities slowed significantly during the past two years, according to a new report. What growth occurred was fueled much more by an increase in grants from government agencies than by a rise in private donations.

The country’s 500 largest charities saw their revenue grow by just 2.6 percent from 2001 to 2002, after accounting for inflation, compared with 7 percent from 1999 to 2000, the Charities Aid Foundation reports in its latest annual survey of giving in Britain.

The report blames the slowdown on several factors, including the cooling economy and the end of the Millennium Gift Aid program, which encouraged charitable donations in 1999-2000 by offering donors special tax breaks.

Donations to the largest charities grew by just 2.2 percent from 2001 to 2002 after accounting for inflation, to some $5.5-billion (or £3.3-billion), the report said. Income from other sources grew by 9.4 percent during the same period, to about $4.5-billion, while grants from government agencies grew by nearly 40 percent.

Total income to those charities over the two-year period was $10-billion.

Trend Reversal

That result signals a reversal of a trend toward greater private support for charities during the past decade.

While half of charities’ income came from voluntary donations in 1995, that share had risen to more than 56 percent by 2000. Last year, the share dipped back to 55 percent.

A long-term shift in revenue away from voluntary donations to government support would raise troubling questions about British charities, said Cathy Pharoah, research director at the Charities Aid Foundation.

“Can they maintain sufficient independence if their voluntary sources of income are shrinking?” she asked.

The report is based on data from the 1,000 charities that raise the most money.

Leading that list are Cancer Research UK (created last year by the merger of the Cancer Research Campaign and the Imperial Cancer Research Fund), which raised about $435-million; the National Trust, which protects open space and historic buildings, $332-million; Oxfam, a humanitarian organization, $313-million; the British Red Cross Society, $260-million; and Barnardo’s, which helps poor children, $201-million.

Among other results: Total assets of the 500 largest fund-raising charities fell by $825-million to $15-billion in 2002; corporate giving to major charities declined by $129-million; and annual fund-raising and management costs among the 500 largest charities continued to average around 13 to 14 percent of total expenditures, as they have for the past two decades.

Copies of the latest edition of the report, “Charity Trends,” are available from the publisher, CaritasData, at Paulton House, 8 Shepherdess Walk, London, N1 7LB, Britain; by calling (44) 207 566 8210; or by e-mail at subs@caritasdata.co.uk.

The price is £129 (approximately $213) for the book version or £179 ($295) for the CD-ROM, plus £15 ($25) for postage.